Friday, March 16, 2012

"China Refused to Fund Agricultural Project in Sudan for Lack of Oil Collateral"

I've been writing academic papers about Chinese engagement (or lack thereof) in agriculture in Africa recently. Today I opened a link to a Sudan Tribune article with the (misleading) headline: "China Refused to Fund Agricultural Project in Sudan for Lack of Oil Collateral." The article is actually about a Qatar agricultural project -- on 250,000 acres -- that depends on a separate Chinese project to extend Sudan's electrical grid.

As the Sudanese leader -- who is avoiding arrest by the International Criminal Court in the Hague -- said, the Qatari agricultural project

...stalled due to China not following through on its
funding for the project of extending the electric grid because the
Chinese loan was in return for oil shipments which stopped after the
secession of the South” the Sudanese leader said. “And so China stopped the financing [the project]” he added.

This is interesting because it is another example of how China Eximbank (almost certainly the lender) works in risky countries with poor or nonexistent credit ratings. The loan for the electricity project was secured with oil exports. When oil exports stopped, the loan disbursement stopped.

I'll also make a bet: somewhere, a journalist is going to read this as "China's" 250,000 acre agricultural project, not Qatar's!